GDMFX - Weekly News

EUR/USD
Forex Technical Analysis: Last week the pair’s direction has been highly influenced by the Fundamental aspect: ECB President Mario Draghi made positive comments regarding signs of economic recovery, strengthening the Euro and the US Non Farm Payrolls posted a worse than anticipated value, weakening the greenback.

Technical Outlook
Price bounced higher after a touch of 1.3480 and moved into the strong resistance zone created by the confluence of 1.3650 and the down trend line drawn from last year’s high. This is a potential turning point which could bring sellers into the market and make 1.3480 the first target to the down side but US Dollar weakness generated by the Non Farm Payrolls report combined with Euro strength may generate an extended move into 1.3710 resistance. At the moment there are no clear signs of a reversal to the down side, just a strong resistance zone ahead.

Fundamental Outlook
The first important event comes Tuesday in the form of Fed Chairwoman Janet Yellen’s testimony on the Semiannual Monetary Policy Report in Washington DC and is followed Wednesday By Mario Draghi’s speech at the European Monetary Institute Conference in Brussels. Both speeches can create strong moves, depending on the matters discussed and the attitude of the participants.

Thursday the US Retail Sales are released, showing the change in the volume of sales made at retail level compared to the previous month. Since retail sales represent about two thirds of the entire consumer spending, the indicator has a high impact on the pair. Friday the German Gross Domestic Product is announced; being an economy’s main performance gauge, it has the potential to affect the Euro strongly, pushing it higher if better values are shown and weakening it if the numbers don’t meet expectations. Later in the day the University of Michigan will announce the US Consumer Sentiment which is a leading indicator of consumer spending.

GBP/USD
Last week Bank of England kept both the Interest Rate and the Asset Purchase Facility value unchanged and the main market mover was the US Non Farm Payrolls report which weakened the US Dollar and allowed the pair to move higher.

Technical Outlook
On a Daily chart we can notice an almost perfect bounce off the support level located at 1.6250 which confirms once again the strength of this level. The first important resistance is located at 1.6600 but we don’t anticipate price to travel such a long distance to the north; bullish moves are very probable during the week to come but we still consider the medium term direction is controlled by the bears and this makes another touch of support a high probability scenario.

Fundamental Outlook
The only Pound affecting event of the week is Wednesday’s release of the Bank of England Inflation Report which will be accompanied by a Press Conference held by Governor Mark Carney and other Monetary Policy Committee members. The Inflation Report contains the Bank’s expectations regarding inflation and economic growth for the next two years and will most likely strengthen the Pound if it contains a positive outlook. Of course, the US events mentioned earlier will have a direct impact on the pair’s direction.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Throughout last week the US Dollar declined against its counterpart as the released data showed a slowing of economic growth due to bad weather conditions which negatively affected business activity.

Technical Outlook

The pair finished last week right on 1.3710 resistance, a level which rejected rising prices several times in the past. Lower moves are very possible but the latest momentum is bullish, especially after the bounce off 1.3480 and the break of 1.3650. A move above 1.3710 would consolidate the control of the bulls and would make 1.3830 the next target, while a bounce lower will shift the balance of power only if 1.3650 is clearly broken to the downside.

Fundamental Outlook

Monday US Banks will be closed celebrating Presidents’ Day and no major European data is released so the first important event of the week occurs Tuesday in the form of the German ZEW Economic Sentiment. Wednesday the FOMC Meeting Minutes will be released, showing the details of the latest Fed meeting regarding the interest rate and the reasons that influenced the members’ vote.

Thursday is an important day as the French and German Manufacturing PMIs are released and Fed Chairwoman Yellen testifies on the Semiannual Monetary Policy Report. This testimony was originally scheduled last week but was postponed due to weather conditions. The US Consumer Price Index which is the main inflation gauge is announced the same day.

Friday the US Existing Home Sales are released and the G20 Meetings start. The meetings will be attended by central bankers and finance ministers from the 20 member states and have the potential to generate strong, fast moves.

GBP/USD

The Pound climbed to 1.6754, the highest level since 2011, fueled by speculation that Bank of England will raise interest rates if the economic conditions keep improving. A positive Inflation Report strongly contributed to the Pound’s strength.

Technical Outlook

Although we considered the bulls to be in control and we expected moves higher, we didn’t anticipate that a move into the resistance located at 1.6750 would come before a retracement lower occurred. If this week the pair will complete a retracement, 1.6600 will most likely act as support while the upper target is 1.6880. The Relative Strength Index is approaching the 70 level even on a weekly chart and price traveled a huge distance with no retracement so we anticipate moves to the down side but the main direction is bullish.

Fundamental Outlook

United Kingdom’s Consumer Price Index which is considered the main gauge of inflation comes out Tuesday but Wednesday will probably be the most important day of the week as the Bank of England will release the Minutes of their latest meeting. The Minutes contain a breakdown of the votes regarding the Interest Rate and the Asset Purchase Facility and important insights into the reasons which determined the members’ votes. At the same time the Claimant Count Change is released, showing the change in the number of unemployed people who ask for social help. The week finishes Friday with the release of the UK Retail Sales which account for the major part of consumer spending and are regarded as a strong market mover.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Throughout last week data was mixed for both European and American economies, a fact which generated a lot of back and forth movement. A clear move finally came during the week’s final trading day on the back of a higher than anticipated European CPI and a weaker US Gross Domestic Product.

Technical Outlook

The recent rally took the pair close to the most important resistance of the year so far: 1.3830. The month that just ended was controlled by the bulls almost completely but this doesn’t mean that a break of the mentioned resistance is mandatory. In the past, 1.3830 acted as a strong barrier in front of rising prices and another rejection is very possible. If this is the case, 1.3710 will be the first level of importance to the down side. The week ahead is full of high impact events which will most likely decide the pair’s next direction; the technical aspect will be overshadowed by these major events.

Fundamental Outlook

Monday’s main event will be Mario Draghi’s testimony in Brussels, before European Parliament’s Committee on Economic and Monetary Affairs. As always, his public speeches are a source of volatility and sharp moves, depending on the president’s attitude and answers so we recommend caution if trading at the time. The US Manufacturing Purchasing Managers’ Index is released the same day, offering an overview of the American manufacturing sector health.

The next important release of the week comes Wednesday in the form of the American Non Farm Payrolls, a report which is released by Automatic Data Processing, Inc., not by the US Government; usually this report offers hints about the government-released report which comes out 2 days later.

Thursday’s main event is the ECB Interest Rate decision which will be followed by the ECB Press Conference. No rate change is expected but the Conference is almost always a market mover; however, price direction cannot be anticipated and will depend almost entirely on Mario Draghi’s attitude and answers to journalists’ questions.

Friday the focus shifts towards the United States for the release of the Non Farm Employment Change report (also known as Non Farm Payrolls). This is the most important data regarding the jobs situation in the US and has the potential to be the week’s main market mover, especially if a surprising number is posted.

GBP/USD

Last week was mostly controlled by the bulls and the pair bounced off the support located at 1.6600, climbing to touch 1.6750. However, a worse than expected UK Gross Domestic Product was posted and the optimism which surrounds the Pound seems to fade away.

Technical Outlook

A major resistance sits in front of rising prices and although the bulls were in control last week, the rally lacks momentum. The Daily candles are small, with long wicks compared to the real body, a fact which suggests that indecision is present in the market. We anticipate a clear break of either 1.6750 resistance or 1.6600 support but the direction of this break will be highly affected by the week’s fundamental events.

Fundamental Outlook

The week opens Monday with the release of the British Manufacturing Purchasing Managers’ Index (PMI), followed Tuesday by the Construction PMI and Wednesday by the Services PMI. All are leading indicators of economic health focused on their respective sectors and have the potential to strengthen the Pound if better numbers are posted.

Bank of England will announce their Interest Rate decision on Thursday, as well as the Asset Purchase Facility value. Although no change is anticipated for either of them, strong movement is likely to be generated. The important US events will have a direct impact on the pair as well.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Mario Draghi’s comments made during last week’s ECB Press Conference strengthened the Euro and boosted the pair above major resistance but a better than expected US Non Farm Employment report stopped some of the bullish momentum.

Technical Outlook

Last week was bullish overall and the major resistance located at 1.3830 was broken, a fact which suggests that buyers may take price on a continued move north. However, the week finished with a move lower which is likely to bring in more sellers, taking price below the recently broken level. If this occurs, 1.3710 will become the first support and 1.3830 will remain resistance as the latest move above would be considered a false break. The recent high located at 1.3914 will most likely act as minor resistance if the pair continues north.

Fundamental Outlook

The Euro Group meetings take place Monday in Brussels and may bring some volatility to an otherwise calm fundamental scene. The next notable event takes place Wednesday in the form of the European Industrial Production which shows the change in the total output produced by the industrial sector. The most important US event of the week is the Thursday release of the Retail Sales which account for the main part of the entire consumer spending which in turn represents more than two thirds of the entire US economic activity.

Friday the German Consumer Price Index is announced, an indicator which is considered the main gauge of inflation; high inflation may eventually determine the ECB to raise interest rates, a fact which is considered beneficial for the Euro. The same day the United States announces the Producer Price Index and the Consumer Sentiment, both important indicators which offer insights into the state of the American economy and the confidence of the consumers.

GBP/USD

The pair had a week which lacked clear direction and price moved in a difficult to trade manner. Bank of England left the interest rate unchanged and most of the economic indicators met expectations last week. The most important event was the release of the US employment situation which took the pair lower on the back of a better than forecast value.

Technical Outlook

As we mentioned many times before, our bias is neutral on the pair until a clear breakout occurs. We maintain this stance but we must note the fact that bulls tried several times to break 1.6750 to the upside and failed to produce satisfactory results. This shows that sellers are offering strong resistance at this level and may step in to take price lower, with 1.6600 being the first target. If a bullish breakout occurs, the first important level is 1.6880 which is better seen on a weekly chart.

Fundamental Outlook

The most important day for the Pound is Tuesday when the Inflation Report Hearings take place. Bank of England Governor Mark Carney will testify before the Parliament’s Treasury Committee regarding the economic outlook and inflation; the hearings last for a few hours and volatility may be present at the time. The same day the British Manufacturing Production numbers come out, offering insights into the state of the manufacturing sector; the rest of the week is slow in terms of data releases for the Pound but the US events will most likely affect the pair’s behavior.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Trading was affected last week by growing tensions regarding the Ukraine crisis which generated choppy price action and a lot of reversals. US economic data was mixed and contributed to the pair’s lack of clear direction.

Technical Outlook

The fact that bulls managed to keep price above 1.3830 for an entire week and also printed a new high at 1.3965, shows that the uptrend is still not exhausted. If this new high will be broken again this week, the next level of interest to the upside is the psychological resistance located at 1.4000 which is also a big round number and this kind of levels tend to have great importance for price action. Although the pair is in an uptrend, a move below 1.3830 would be proof of bear-strength and would make 1.3710 the next target of the week.

Fundamental Outlook

The first day of the week brings us the release of the Euro Zone Consumer Price Index which is the most important gauge of inflation but it tends to have a limited impact on the pair because the German CPI (which accounts for the major part of European inflation) was already released. Tuesday the German ZEW Economic Sentiment will be the main European event while the US will release the Consumer Price Index which, as mentioned before, has high inflationary implications.

Wednesday has the potential to be the most volatile day of the week and all eyes will be on the US for the release of the Interest Rate, FOMC’s Economic Projections and Fed Chairman Yellen’s Press Conference. The press conference is likely to be a huge market mover, especially in its second part when Janet Yellen will answer audience questions. The Fed will also decide whether they will further adjust the monetary stimulus program or not, an issue which has been a top concern of market participants and is likely to generate tremendous volatility.

Thursday the US Existing Home Sales and the Philly Fed Manufacturing Index are released, offering insights into the situation of the housing market and the progress of the manufacturing sector. The last important event of the week comes out Friday in the form of the Euro Zone Trade Balance which shows the difference between imported and exported goods. The impact of this indicator is not always high, especially if the actual number is close to the forecast.

GBP/USD

The beginning of last week was characterized by a strong move lower which took the pair close to 1.6600 support but for the rest of the week, the bears struggled without success to continue the move and break the mentioned level.

Technical Outlook

The balance of power starts to shift in favor of the bears although the pair is still in a range defined by 1.6750 resistance and 1.6600 support. Important to note is the fact that last week price moved up after a touch of 1.6600 but the bears quickly took it back down, resulting in a Daily pin candle (Thursday). Pin bars usually indicate rejection and in this particular case, a move south is expected, but the fundamental aspect of the week will have an important role and may change this scenario.

Fundamental Outlook

Bank of England Governor Mark Carney is scheduled to speak Tuesday in London at the Annual Mais Lecture. His speeches are potential market movers and the market often reacts to his attitude or to clues about future interest rates. Wednesday the Band of England will make public the Minutes of their latest Meeting; the Claimant Count Change which is released the same day will offer insights into the British jobs situation. These are the main events for the Pound but the pair will be directly affected by the US data released throughout the week.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: A potential weakening of the long-term uptrend

EUR/USD

Forex Technical Analysis: Last week the market finally came out of its indecision state and the bears took control of the pair on the back of a hawkish Fed Meeting. The US monetary stimulus program was cut by another 10 billion US Dollars and predictions were made about a potential Interest Rate increase, two factors which triggered US Dollar strength and a drop for the pair.

Technical Outlook

As we can see on the Daily chart above, the pair is in a long term uptrend and the latest drop looks like a retracement, not a reversal. However, a move below the important support located at 1.3710 would severely weaken the uptrend and would make 1.3480 the next target for the bears. Because the pair is trending up, a touch of 1.3710 may result in a bounce higher, especially if at the time, the Relative Strength Index will be in oversold territory.

Fundamental Outlook

The first major economic indicator of the week ahead is released Monday in the form of the German Manufacturing Purchasing Managers’ Index which acts as a leading indicator of economic health focused on the Manufacturing sector. The same indicator but for the US economy will also be released later in the day.

Tuesday’s main releases will be the German Ifo Business Climate and the US Consumer Confidence; these indicators are gauges of optimism among businesses and consumers respectively and usually have a hefty impact on the market. Wednesday the only important release is the US Durable Goods Orders which is a leading indicator of production because a higher number suggests that production will have to increase to fill those orders. The indicator also shows consumer optimism because durable goods require a larger investment and are often purchased when the consumer feels confident about the economic situation.

The last major release of the week is scheduled Friday and it’s the German Consumer Price Index, an indicator which usually has a great impact on the Euro and can strengthen it if higher than anticipated numbers are posted. A higher CPI indicates that inflation has increased and this may eventually determine the European Central Bank to adjust interest rates since the German economy represents the major part of the Euro Zone economy.

GBP/USD

The US Dollar strengthened against most of its counterparts as a result of the Fed decisions and the Pound was no exception. This strength seen throughout last week generated the much anticipated break of 1.6600 and as a result, almost the entire week was bearish.

Technical Outlook

Similar to the EUR/USD, this pair is in a long term uptrend so even if the bears are in control for now, moves north are a distinct possibility. If price starts to move up, the first resistance will be encountered at the recently broken level of 1.6600 and a move back above this level would indicate underlying bull strength. The first major support is located at 1.6250 and although we don’t anticipate a touch of this level to occur this week, a strong move towards it would show bear strength and a clear weakening of the uptrend. Keep an eye on the Relative Strength Index as it’s approaching oversold territory and can add bullish impulse if it will go below the 30 level and start to move up from there.

Fundamental Outlook

The Pound will be affected by two important releases this week: the Consumer Price Index and the Retail Sales. The first indicator comes out Tuesday and as mentioned before, it’s the main inflation gauge and is closely watched by the Bank of England because values outside a certain scale call for a rate adjustment. United Kingdom’s Retail Sales are released Thursday and usually have a high impact on the pair’s movement because the majority of consumer spending is represented by sales made at a retail level. Higher numbers are indicative of a thriving economy and potentially a stronger Pound. The pair’s movement throughout the week will be highly affected by the US economic indicators mentioned above.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: During last week, the US economy posted mostly better than anticipated data and the greenback strengthened as a result. The pair traveled south and touched main support which couldn’t be broken.

Technical Outlook

The support level located at 1.3710 was touched but the bears’ power wasn’t enough for a break; however, the subsequent bounce up doesn’t necessarily mean that higher prices will follow and we expect another encounter with support. If this new potential touch of 1.3710 will result in another failed break, it could mean that bulls are ready to take back control of the pair and take it above 1.3830. The Relative Strength Index on a Daily chart doesn’t indicate an extreme condition of the market and at the moment we are still in an uptrend (from a Daily chart perspective).

Fundamental Outlook

The first important event of the week is the release of the Euro Zone Consumer Price Index which shows fluctuations in inflation. A higher value is considered bullish for the Euro because the ECB may step in to adjust the Interest Rate if inflation becomes worrying. A speech of Fed Chairman Yellen is scheduled for the same day and can be a source of strong movement.

Tuesday the release of the US Manufacturing PMI is the only notable event while Wednesday, Automatic Data Processing Inc. will announce the US Employment Change numbers. This report is generated by a private company but it manages to offer hints about the Non Farm Payrolls which are released 2 days later and are regarded as the most important US employment indicator.

The most important event of the week is scheduled Thursday and it’s the ECB Press Conference which follows the Interest Rate decision. The Rate is not expected to change so Mario Draghi’s speech at the press conference will probably overshadow the rate decision release. He will also answer journalists’ questions and his attitude will most likely trigger sharp moves.

The last market-mover of the week comes out Friday in the form of the US Non Farm Employment Change (also known as Non Farm Payrolls or NFP) which is considered to be the main gauge of employment levels in the United States. Employment is closely related to consumer spending so a higher reading for the NFP usually strengthens the US Dollar.

GBP/USD

The bulls were in control of last week’s price action, taking the pair above the important level of 1.6600 on the back of a much better value of United Kingdom’s Retail Sales.

Technical Outlook

The pair is in a clear uptrend from a long term perspective and now bulls scored another victory by taking price back above 1.6600. The Relative Strength Index doesn’t show an overbought condition so price still has room to move to the upside, solidifying the control of the bulls; however, if price returns below 1.6600 early in the week, the uptrend line drawn from late 2013 will offer good support and a break of this line can trigger a continued move lower.

Fundamental Outlook

Monday Bank of England Governor Mark Carney will speak at a press conference in London and throughout the week, three Purchasing Managers’ Indexes will be released: the Manufacturing PMI, Construction PMI and Services PMI will come out Tuesday, Wednesday and Thursday respectively. These are leading indicators of economic health, each focused on a different sector and with the ability to strengthen the Pound if better numbers are posted. The important US events mentioned earlier will have a direct and strong impact on the pair as well.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Throughout last week, the bears were in control of the pair, on the back of Euro weakness generated by Mario Draghi’s comments made at the ECB Press Conference. He expressed concerns about deflation and said that unconventional methods may be applied in order to counter it.

Technical Outlook

The week ended lower and the major support located at 1.3710 was tested. This shows that bearish pressure is present but bullish signs exist as well: price has reached the uptrend line drawn from July 2013 and 1.3710 is not decisively broken. These two types of support (diagonal and horizontal) create a confluence zone around 1.3700 which is a lot stronger than simple support. Since the pair is at such an important level, a bounce-or-break scenario is in play: a break will most likely generate a move close to 1.3480 which is the next support (probably such a move will not be completed in a single week), while a bounce may take price back into 1.3830 resistance.

Fundamental Outlook

The week ahead is slower in terms of economic releases than the one that just ended, with the first two days lacking major indicators. Notable however are Monday’s German Industrial Production numbers and the US Jobs Openings that are released Tuesday. Wednesday the FOMC Meeting Minutes are released, containing insights into the reasons that stood behind the latest Federal Funds Rate vote and other details of the meeting. Usually this event has a high impact and it’s closely watched by market participants in an attempt to find hints about future monetary direction.

Thursday the ECB will release their Monthly Bulletin; it contains information about the statistical data which was analyzed by the Bank when the Interest Rate decision was made and also an economic outlook. The G20 meetings will start Thursday as well, with the main focus being Russia and Ukraine. Irregular movement may be experienced throughout the day. Friday the G20 Meetings will continue and the US will release their Producer Price Index and Consumer Sentiment, two important indicators which can move the pair strongly if surprising numbers are posted.

GBP/USD

The British data released last week disappointed and the result was a move below 1.6600. The US employment data did not create strong directional movement mostly because the actual number was close to the anticipated one. Overall we had a bearish week, which lacked strong momentum.

Technical Outlook

Last week’s descent brought the pair close to the trend line drawn from last November’s lowest point but a serious attempt at breaking it wasn’t made. The level of 1.6600 was broken to the downside once again but the break is not strong so we might see moves higher, especially if the trend line mentioned before will be touched. A clear move below 1.6600 and below the trend line would mean that bears are starting to pick up momentum and the uptrend will be severely weakened.

Fundamental Outlook

United Kingdom’s Manufacturing Production will be released Tuesday; the indicator measures the efficiency of the manufacturing sector which makes up for about 80% of the entire British Industrial Production so this is generally regarded as a high impact release.

Thursday is the most important day of the week for the Pound as the Official Bank Rate and Asset Purchase facility are announced. Although no change is expected for either one, the day will most likely be characterized by strong movement. Throughout the week, the pair will be strongly affected by the US releases as well.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Last week the bulls scored a major victory and what appeared to be a break of support actually turned into a clear and strong bounce higher which took the pair close to the year’s high.

Technical Outlook

The trend line we mentioned last week, combined with the strength of 1.3710 support, generated an almost perfect bounce higher. The uptrend is intact and the bulls are in control of the market so we expect price to move higher, approaching or even breaking the year’s high located at 1.3965. Because price traveled a hefty distance in a single direction, we also expect bearish retracements before bulls can take price higher. The main levels to watch this week are 1.3965 as resistance and 1.3830 as support, followed by 1.3710; the trend line will also provide diagonal support if it’s touched again.

Fundamental Outlook

The week begins Monday with the release of an important US indicator in the form of Retail Sales. Being a major part of American consumer spending, sales made at a retail level can highly influence the pair’s direction and can strengthen the US Dollar if better numbers are posted. Tuesday the German ZEW Economic Sentiment is released, followed by the US Consumer Price Index which has inflationary implications and will probably be the day’s main event.

Wednesday it’s Euro Zone’s turn to release the Consumer Price Index. Its importance comes from the fact that ECB closely watches it when the Interest Rate decision is made, in an attempt to keep inflation between certain ranges (just below 2% is considered optimal).

The last event of the week is Thursday’s release of the Philly Fed Manufacturing Index which is a survey based on the opinions of about 250 manufacturers from the Philadelphia district. Friday most Banks will be closed in celebration of Good Friday so irregular movement and low liquidity will be present.

GBP/USD

The Pound strengthened significantly last week, on the back of positive economic data and this translated into a bullish rally above 1.6750 resistance.

Technical Outlook

The latest bullish move was stopped by the resistance located at 1.6820, a level which wasn’t visited by price since the year 2009. Now we can notice that a Double Top has formed; this chart pattern which is considered bearish is often seen at the end of an uptrend or before a major retracement. This makes us believe that price will slide towards 1.6600 but keep in mind that bulls are showing a lot of strength so moves north have a high probability of happening.

Fundamental Outlook

The British Consumer Price Index will be released Tuesday and will probably be the week’s main event for the Pound as the CPI is the prime measurement of an economy’s inflation. Higher values have the ability to strengthen the Pound, taking the pair higher. Wednesday the UK Claimant Count Change is announced, tracking changes in British unemployment and Friday Banks will be closed. Of course, the US events mentioned above will directly influence the pair throughout the week.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Although the data released by the United States last week surpassed the estimated figures, the pair’s movement was choppy and slow, a fact which was most likely generated by the approaching of Easter.

Technical Outlook

Especially during the second part of last week, volume started to decrease and price became almost impossible to trade; the entire week lacked clear direction and this makes it hard to anticipate the next move but from a Daily chart perspective, price is still in an uptrend and if the current level of 1.3830 can be surpassed, the next target will be 1.3965. To the south, support sits at the trend line drawn from July 2013 and at 1.3710.

Fundamental Outlook

Major Banks around the world will be closed Monday in observance of Easter and no economic indicators will be released. Tuesday’s only notable indicator is the US Existing Home Sales and a similar indicator is released Wednesday: US New Home Sales. Both indicators offer insights into the American housing market and have the potential to strengthen the greenback if better than expected figures are posted. The same day the French and German Manufacturing PMIs come out, showing the opinion of purchasing managers from the Manufacturing sector about the current and future economic conditions in their respective countries.

Thursday will be the busiest day of the week as ECB President Mario Draghi will speak at a conference in Amsterdam, the German Ifo Business Climate (derived from the opinions of about 7,000 businesses) is released and the United States announce the Durable Goods Orders (acts as a leading indicator of production because a higher number of orders suggests that producers will increase their activity to fill those orders). Friday will be a slow day, with no major indicators released by either Europe or the United States.

GBP/USD

Last week’s most important event for the Pound was a surprising drop in unemployment levels, a fact which strengthened the currency and allowed the pair to move higher.

Technical Outlook

The bullish move we talked about couldn’t be continued, mostly because volume dropped towards the end of the week. At the moment the pair made a triple top at 1.6820 and this pattern may forecast the end of the uptrend. Once volume picks up, it will become clearer if the current resistance can be broken or if the triple top we talked about will push price lower, into the support located at 1.6750. The uptrend line seen on the chart above can also act as diagonal support if touched.

Fundamental Outlook

The Bank of England will release Wednesday the Minutes of their latest Interest Rate meeting, containing details regarding the economic reasons which determined the members’ votes and possible hints about future monetary direction. The last event of the week occurs Friday in the form of United Kingdom’s Retail Sales which represent an important part of consumer spending and can positively affect the Pound if better than expected numbers are posted. As always, the US events will have a direct impact on the pair’s movement.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Last week trading was extremely slow, mainly due to the Easter Holidays which produced low volume. During a speech in Amsterdam, Mario Draghi suggested that adjustments to the Interest Rate might be made if Euro Zone’s Consumer Price Index doesn’t show improvement.

Technical Outlook

For about two weeks the pair traded very close to 1.3830, without managing to move away decisively. This fact makes a technical prediction less accurate so our stance is neutral, in anticipation of a strong move which may find resistance at 1.3965 and support around 1.3700. The first potential support is located at the uptrend line visible on the chart above.

Fundamental Outlook

Monday the United States release the Pending Home Sales numbers an indicator that tends to have varying impact, depending on the difference between expectations and actual values. Tuesday the German CPI will reveal inflation data for the German economy and the US Consumer Confidence comes out, a leading indicator of consumer spending.

Wednesday’s most anticipated release is the Euro Zone Consumer Price Index, an indicator that is used by the ECB as their inflation target. Considering Mario Draghi’s comments made last week, this release of the CPI gains extra weight. The same day the value of the US Gross Domestic Product is announced, as well as the Federal Funds Rate which is not expected to change but can create volatility nonetheless.

Thursday banks across Europe will be closed due to Labor Day and the United States will release the Manufacturing PMI, a survey of purchasing managers which attempts to measure optimism regarding the economic conditions in the Manufacturing sector. Friday will be probably the most volatile day of the week as the US Non Farm Employment Change (also known as NFP) is announced. This is considered the most accurate and important report on US employment and its impact is almost always huge.

GBP/USD

British data released last week was rather scarce and the impact on the market wasn’t substantial. Even UK’s Retail Sales release failed to create more than just a brief push up which was quickly reversed.

Technical Outlook

We’re experiencing an almost flat market lately. This behavior makes technical prediction almost impossible but a few factors must be noted: the resistance at 1.6820 is still holding although the bulls made several attempts to break it; the Relative Strength Index is moving close to its 70 level, a fact which indicates exhaustion of upward momentum. On the other hand, bears also lack determination and 1.6750 support rejects almost immediately all moves that come in close vicinity so the picture is very unclear and we must wait for a clear show of power from either bulls or bears.

Fundamental Outlook

The first Pound-affecting event is scheduled Tuesday in the form of the Gross Domestic Product which is the prime measurement of an economy’s overall performance. Thursday and Friday the Manufacturing PMI and Construction PMI are released respectively; these indicators show the level of economic optimism among purchasing managers from the manufacturing and construction sectors and usually higher numbers strengthen the Pound. As always, the US events will have a direct impact on price action.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Last week the Euro showed signs of strength as European inflation rose to 0.7% and overall we had a bullish week although the US Non Farm Employment Change showed a hefty increase. The uptrend is still intact but we didn’t see substantial advances.

Technical Outlook

The uptrend line drawn from last July is still rejecting price higher and the Relative Strength Index is not showing an overbought condition of the pair, so bullish moves can be expected. The week closed above 1.3830 so momentum still favors the bulls and 1.3965 may be the first target, followed by the psychological resistance at 1.4000. Support is represented by the uptrend line and by 1.3700.

Fundamental Outlook

The economic week starts Monday with the release of the US Non Manufacturing PMI which is a survey focused on economic health, excluding the manufacturing sector. Tuesday the US Trade Balance is released, showing the difference between imported and exported goods.

Fed Chair Janet Yellen will testify Wednesday in Washington DC, in front of the Joint Economic Committee of Congress and her speech, as always, has the ability to generate sharp moves depending on the matters discussed and her attitude. Probably the most important day of the week will be Thursday when the ECB will announce their decision regarding the Interest Rate. Mario Draghi indicated that a rate adjustment is in order if the Euro Zone inflation doesn’t pick up, so we will have to wait and see if the latest CPI increase is enough for the ECB to leave the rate unchanged. A Press Conference, which is another reason for increased volatility, will follow shortly.

Friday will be a slow day in terms of economic releases, with the only notable indicator being the German Trade Balance.

GBP/USD

The Pound continued to gain against the US Dollar during the course of last week as the United Kingdom showed more signs of economic expansion and as a result the pair printed a new 4-year high at 1.6920.

Technical Outlook

Without a doubt the pair is controlled by the bulls at the moment and we are likely to see moves higher this week, but before that can happen, a retracement is needed, considering the position of the Relative Strength Index (overbought) and the fact that we experienced a long period of upwards movement. The first major support is represented by 1.6750 and moves lower are likely to be rejected from there.

Fundamental Outlook

The first notable release that can affect the Pound is the British Services PMI which comes out Tuesday, showing the level of optimism among purchasing managers from the Services sector. Thursday the Bank of England will announce the Interest Rate and the Asset Purchase facility value but no change is anticipated for either of them and significant moves are not expected. United Kingdom’s Manufacturing Production is released Friday, potentially strengthening the Pound if better numbers are posted. The US events mentioned earlier will also have a direct and high impact on the pair’s movement.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

FOREX TECHNICAL ANALYSIS: MAJOR SUPPORT LEVELS THREATENED. WHAT WILL BE THE ANSWER OF THE BULLS?

EUR/USD

Forex Technical Analysis: The week that just ended was mainly characterized by Euro weakness generated by speculation that ECB will implement more measures to improve the current economic situation. Although the measures weren’t specified, a rate cut in June is at the top of the list.

Technical Outlook

The break of the long term uptrend line generated additional bearish impulse and took price into 1.3700 support. Although price moved briefly below this level, a clear break didn’t occur and at the moment we are seeing signs of rejection but momentum favors the bears; if we are going to see a break, price will most likely move upwards before going through the level at 1.3700. If during the week we will see another failed attempt to break support, it will be a sign that bears don’t have enough steam left and that higher prices will follow.

Fundamental Outlook

German Bundesbank President Jens Weidmann will speak Monday at a Symposium in Frankfurt and this will be the day’s only notable event but volatility will mostly depend on the matters discussed and his attitude. Wednesday the Fed will release the Minutes of the latest FOMC Meeting, explaining the reasons that stood behind their latest vote regarding the interest rate. The strength of the movement created by this release varies but if hints about future monetary policy are offered, its importance will increase.

Thursday France and Germany announce their Manufacturing PMIs, which are leading indicators of economic health and of optimism among purchasing managers, with the ability to strengthen the single currency if an increase is posted. The same day the US Existing Home Sales come out, offering insights into the American housing market. Additional information about the housing situation will be offered Friday by the US New Home Sales numbers while the Euro will be influenced by the release of the German Ifo Business Climate, a survey based on the opinions of about 7,000 businesses and focused on current economic conditions and 6-month outlook.

GBP/USD

Last week BoE Governor Mark Carney suggested that a rate increase is not the next thing on their agenda and that more time may pass until the central bank will consider a rate hike. Some market participants were disappointed by the Governor’s stance and lost interest for the Pound, generating a bearish week.

Technical Outlook

From a long term perspective the pair is in an uptrend and the Pound has been one of the best performers this year, but the short term momentum belongs to the sellers and a top seems to be established at 1.6996. If this week price will manage to break the uptrend line drawn from November last year, the uptrend will be severely weakened and the next target will be the support at 1.6600. The level of 1.6750 and the uptrend line create a confluence zone around the point where they intersect and the bears will have trouble breaking it, but if they succeed they will tip the medium term balance in their favor.

Fundamental Outlook

United Kingdom’s Consumer Price Index will be Tuesday’s main event but British inflation is not a concerning issue at the moment so the impact of the release may be milder than usual. Wednesday the Bank of England will make public the votes on the latest interest rate decision, a good opportunity for traders to assess the MPC members’ stance regarding a future rate increase. Retail Sales are announced the same day and the last major indicator for the Pound will be released Thursday in the form of the British Gross Domestic Product. Without a doubt, the pair’s movement will be affected throughout the week by the US events mentioned above.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Speculation about a potential ECB interest rate cut in June continued last week, affecting the pair’s direction and generating a good break of 1.3700. Disappointing economic data for the Euro Zone also contributed to the bearish behavior.

Technical Outlook

The bears continued their “assault” on support levels and 1.3700 was broken in the process, solidifying their control. Although the trend seems to be reversing, the Relative Strength Index on a Daily Chart is showing an oversold condition, a fact which makes us believe that bullish moves will occur in the first part of the week. If this comes true, 1.3700 will most likely serve as resistance which will push the pair lower once it is touched.

Fundamental Outlook

Monday US Banks will be closed in celebration of Memorial Day so there will be no US economic releases but ECB President Mario Draghi will deliver a speech at the European Central Bank Forum, in Portugal. As always his speeches can create a lot of sharp moves, especially if he will offer hints about ECB’s next move regarding monetary policy.

Tuesday the US Consumer Confidence is released; this is a leading indicator of consumer spending and it is based on a large sample of about 5,000 households. Wednesday we have a rather slow day in terms of economic releases and Thursday French and German Banks are closed in observance of Ascension Day. The main event for the US Dollar will be the release of the US Preliminary Gross Domestic Product which can strengthen the greenback if it shows an increase since this is the main measurement of an economy’s overall performance. Friday is again a slow day, with the only notable release being the German Retail Sales which usually move the market strongly if a hefty difference between analysts’ expectations and actual numbers is posted.

GBP/USD

The British economy showed signs of continued improvement and last week we saw an increase in CPI and a better than expected value of the UK Retail Sales. These factors facilitated a climb into 1.6920 but resistance proved too strong and price bounced lower.

Technical Outlook

The resistance at 1.6920 was touched twice last week and it’s pretty clear that for the time being it cannot be broken. This week we expect another attempt to break the uptrend line drawn from last November and a potential test of 1.6750 support. From a medium term perspective, this level is very important and a clean break would imply that bears are starting to shift momentum in their favor.

Fundamental Outlook

For the entire week ahead, economic data will be scarce for the Pound: Monday UK Banks are closed, celebrating Spring Bank Holiday and the only notable event will be the release of the British Bankers’ Association Mortgage Approvals, scheduled Tuesday. This is a leading indicator of house demand because usually houses are purchased with the help of a mortgage. Throughout the week, the pair will be also affected by the US events already mentioned.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.

Forex Technical Analysis: Last week we experienced slow movement due to bank Holidays and mixed economic data. No major developments took place and the week ended close to its opening price.

Technical Outlook

The Relative Strength Index on a Daily chart is coming out of oversold territory, increasing the chance of a retracement higher. Last week’s low located at 1.3585 will act as minor support this week, while resistance is located at 1.3700 but price direction this week will be heavily influenced by the ECB’s decision regarding further monetary policy easing.

Fundamental Outlook

The week starts Monday with an important inflation indicator: the German Preliminary Consumer Price Index and continues Tuesday with an even more important one: the Euro Zone Consumer Price Index. Inflation has been a major concern of the ECB lately because it’s highly correlated with a potential rate change so the release may have a higher impact than usual.

Wednesday the Group of 7 (G7) meetings start and the US will release the ADP Non Farm Employment Change, a report put together by a private company, which tries to mimic the Government issued data that comes out 2 days later. Thursday has the potential to be the most important day of the week as the ECB Interest Rate is announced and a Press Conference takes place. The rate is expected to drop from 0.25% to 0.10% and if this comes true, President Mario Draghi will probably explain the reasons of the rate cut during the Press Conference. Both the rate announcement and the Conference will most likely generate huge volatility and caution is highly recommended.

The final high-impact indicator of the week comes out Friday in the form of the US Non Farm Employment Change (also known as Non Farm Payrolls). This is the most important employment data released by the United States and almost always its impact is very strong. Better numbers suggest economic expansion and a future increase in consumer spending, leading to a stronger US Dollar.

GBP/USD

The greenback showed increased strength against the Pound last week, managing to take the pair lower and to break the long term uptrend line drawn from last November.

Technical Outlook

The break of the trend line we just mentioned signifies a major victory for the bears and prepares the stage for a full scale reversal of the bullish trend. However, price returned to re-test the level of 1.6750 and we must wait to see if it bounces lower or breaks through to the upside. Price behavior in close vicinity to 1.6750 will influence the next direction but the crucial fundamental events scheduled this week will determine medium term trend.

Fundamental Outlook

The United Kingdom releases the Manufacturing, Construction and Services PMIs during the first three days of the week respectively and Thursday the Bank of England will announce the Interest Rate decision. A rate change is not forecast but there has been a lot of speculation about an increase in the near future so any hints coming from the BoE about such increase will send the pair north on the back of Pound strength. Special attention must be paid to the US Non Farm Employment report as it will highly influence the pair’s direction.

Written by: Bogdan Giulvezan

The article above is based on the writer’s 5-year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view of the market.